Rs 7.9 lakh cheque cleared with forged sign? Bank of Baroda asked to pay Rs 8.5 lakh

The commission relied on the handwriting expert’s report, which found that the signature on the cheque did not belong to the complainant. It held that the bank had failed to exercise due care while comparing the signature.

Allegations of fraud

Super Ispat (Raipur) Pvt Ltd maintained a current account with the Raipur branch of Bank of Baroda. On August 19, 2014, a cheque – which the company’s director claimed was still in its possession – was allegedly used to withdraw Rs 7.90 lakh from its account through the bank’s Bhandara branch. The cheque was issued in the name of another person.

The company approached the bank seeking reversal of the amount. However, the bank informed that it could not do so. The director then approached the banking ombudsman and also filed a consumer complaint, alleging deficiency in banking service and unfair trade practice.

Bank of Baroda denied liability, contending that the complainant had issued the cheque and had failed to act on SMS alerts regarding the transaction. It submitted that, after learning about the alleged fraudulent transaction, the bank had acted promptly by lodging an FIR on August 23, 2014, and the police had later sought the original cheque.

No proof of SMS sent: Order

The commission noted that it was undisputed that the complainant maintained an account with Bank of Baroda and had been issued a cheque book containing cheque No. 604635. The dispute was whether the complainant had actually issued this cheque for payment.

It found that the original cheque remained in the complainant’s possession. This was evident because the complainant later handed it over to Bank of Baroda when the bank sought it for verification.

The commission observed that if the complainant had genuinely issued the cheque in favour of Manish K Thakkar, the original cheque would not have remained with the complainant. It, therefore, rejected the bank’s defence that the complainant itself had issued the cheque. “When the disputed cheque was presented for clearing through another bank, Bank of Baroda was required to exercise due caution and follow proper banking procedures before making payment,” it added.

The commission also rejected the bank’s argument regarding contributory negligence based on SMS alerts. It noted that the bank had not produced any document showing that an SMS regarding the disputed cheque being presented or paid had actually been sent to the complainant. Therefore, the bank’s defence on this point could not be accepted.

It ultimately held that since the bank failed to exercise due caution in verifying the cheque and signature, it was fully responsible for the payment made on the fraudulent cheque, amounting to deficiency in service and unfair trade practice.

Takeaway

The judgment highlighted that banks must exercise due caution while clearing cheques and properly verify signatures before making payments. It also makes clear that customers cannot be blamed for contributory negligence merely because SMS alerts are available, unless the bank proves that such alerts were actually sent.

Consumers facing similar grievances may contact the consumer helpline in their respective states (Chhattisgarh: 1800-233-3663) or dial the National Consumer Helpline at 1915 for assistance.

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